NEW YORK—The Boutique Design New York and HX: The Hotel Experience Powered by AAHOA conferences kicked off yesterday here at the Jacob K. Javits Convention Center with a diverse menu of opportunities for attendees. In addition to the opportunity to explore the trade show upstairs, BDNY and HX also offered a broad lineup of panels, including ones on food and beverage, labor and brand growth.
In one of the day’s first panels, executives discussed how to maximize restaurant profits in a panel moderated by Hotel Management Associate Editor Jena Tesse Fox.
Panelist Dimitri Mitropoulos, Dream Hotel Group's VP of F&B, identified guest service, along with consistency and ambience, as keys to balancing quality and value. “When you’re coming into an establishment, you can really judge the quality on the guest service,” Mitropoulos said.
Vincent Mauriello, managing partner and director of operations at Gerber Group, brought up enhancing the guest experience as a way to surpass already-high expectations. “The guest sits down, they order their food and, ‘Wow, the food was great, yeah, I was expecting it to be great, the cocktail looks great, I was expecting that; I wasn’t expecting the server to be so nice, I wasn’t expecting the manager to come over and remember that it was our birthday, our anniversary, I wasn’t expecting the host to give me a sincere goodbye on the way out.’”
“You don’t see a menu item line for hospitality, for service,” added Hospitality Ventures Management Group’s VP Marcus Marshall. “That’s where you can really over-deliver and increase the value perception.”
Saving on Labor by Reducing Turnover
Later in the day, Chip Rogers, president/CEO of the American Hotel & Lodging Association, moderated a panel on labor with Joel Carver, president/CEO of The Carver Cos.; Del Ross, chief revenue officer for Hotel Effectiveness; and Adam Rowledge, managing director at Rowledge Associates.
One of the main topics of discussion was reducing turnover. Ross provided two numbers that illustrated the importance and severity of the issue: 30 percent—the amount of an employee’s full-year pay that it costs the employer to replace that position—and four months—the average turnover time for housekeepers in the United States. Perhaps more notably, Ross said the turnover rate for the assistant general manager position is 115 percent (housekeeping is 168 percent).
The panelists provided the audience with numerous tactics for reducing this trend. These suggestions included working on communications and building trust, according to Rowledge, and providing life skills training, according to Carver.
In one of the first day’s last sessions, several brand leaders gathered to discuss the “heatmap” of what brands are entering what markets and how mergers and acquisitions are changing the growth dynamic. Moderated by Aileen Canta, founder of hotel development and design company AF Canta, the panel examined the delicate balance between supply and demand as well as between boutique appeal and corporate power.
Development depends on the cost of land, said Mitchell Salaman, VP of Mid-Atlantic and Northeast at IHG, noting that in his region, which stretches from Washington, D.C., up to Maine, the cost of land “puts a damper” on growth. While on a recent trip to Oklahoma, Salaman noted how many hotels were within a 30-minute drive of the airport. “I was amazed by the amount of development,” he said. Because the cost of land is so much cheaper, hotels in that market don’t need 70 to 80 percent occupancy to turn a profit.
Still, the Northeast and Mid-Atlantic region is in demand, and Salaman sees development in the D.C. suburbs and in New Jersey. Developers are still spending big money for a presence in New York City, with one recently spending $140 million for a plot on 46th Street near Times Square, looking to build three hotels. California is “very similar to New York” in terms of growth, although the northern part of the state is seeing “smaller production” compared with the central and southern areas.
As Paris-based Accor gains ground worldwide, said Mark Purcell, the company’s VP of development for North America, the team selects target markets for each of its brands. “We rate those markets as A, B and C,” he said. “These are the areas we are trying to penetrate.” While the company may focus on those markets, he added, they will “react” when presented with an opportunity “in a location that may not be A, B or C but could be interesting … We evaluate on a case-by-case basis.” Being an asset-light company makes this easier, he added, since Accor is not writing the checks for the developments. Rather than steering the metaphorical ship, he said, the company can simply adjust the sails and “work with the wind” to go where each brand should be.
Rika Lisslö, VP of acquisitions and development for Hyatt Hotels Corp., noted the company’s recent swath of acquisitions and partnerships. She formerly was VP of acquisitions and development for Two Roads Hospitality before the company was acquired by Hyatt last December.
Related Story: Hyatt completes acquisition of Two Roads Hospitality
As part of Hyatt, she said, the Two Roads brands are maintaining their identities as they grow. The company is positioning the Thompson brand for the top 25 markets in the country, while Joie de Vivre is better suited for secondary and tertiary markets, particularly locations with “history,” she said.
Merging with Hyatt has helped the Two Roads brands grow, she said, because lenders have insisted on bigger brand names for projects. “It’s easier to finance,” she said. “All the brand DNA, what the brands stand for, is the same. We just have the added benefit of being backed by Hyatt.”
Hotel ROI, owned by Hotel Management's parent company Questex, presented the Maximizing Restaurant Profits, Cutting Costs and Assessing Pricing Strategies and Labor: How To Turn Your Biggest Expense Into Your Best Investment panels. Look out for more in-depth coverage on these panels later this month.